BoG governor: Greek economy can enter into a growth orbit

There is serious evidence that the Greek economy can enter into a growth orbit based on a new growth model focusing on healthy business activity, investments and extroversion, Bank of Greece Governor Yannis Stournaras said on Friday.

Addressing a conference on exports and development, the Greek central banker said that this development did not mean that the greater part of the weakness hindering export performance in the past has been resolved. This was confirmed by the fact that, despite a recovery in international competitiveness and rising trend in exports, the country's export performance still lagged behind expected levels, based on historical analysis of these two figures, Stournaras said. He noted that the country still had a lot of distance to cover before exports became one of the main tools for economic growth. Stournaras reported that, according to the World Economic Forum, Greece ranked 87th among 137 countries in the quality of its institutions in the 2017-2018 Global Competitiveness Index, while the country remained in low places in public spending efficiency, administrative burden and the efficiency of the legal framework to resolve differences. Also, Greece ranked at the bottom of the index for tax incentives offered for investments and labour, although the country was improved significantly in the terms of founding businesses. Stournaras acknowledged there were difficulties in the funding of enterprises, but also because of over-taxation, which slowed or stopped progress towards restoring total competitiveness. He noted that there were still issues to be resolved - such as lowering the non-payroll cost of enterprises, introducing a stable tax system and creating an economic environment friendly to enterprises - along with an efficient and flexible institutional framework facilitating investments. The central banker underlined that Greece needed new investments to be able to improve in crucial innovative and competitive industrial sectors, in large enterprises with high added value and high-skilled job positions.